Daimler and BMW will invest $1 billion in mobility JV to rival Uber

Volkswagen and Ford recently announced a collaboration in the commercial vehicle business, Today have been Daimler manufacturer of Mercedes and Smart, and BMW which have communicated a joint alliance with the aim of, beyond continuing to compete in the commercialization of vehicles, go hand in hand in the business of mobility in its many variants. Thus, they will confront together a sector in which technological platforms such as Uber are challenging the traditional automotive business.

The plans of both German groups are ambitious. They propose a network of five joint ventures in different business areas and an investment of 1,000 million euros in the coming years, with the participation and development of their own startups.

The users of MyTaxi, one of the most popular applications in the taxi sector, owned by Daimler, today received an email in which they were informed that in the next months the name of the application will change to Free Now, one of the five companies created jointly by the two brands.

That same email also gives an idea of the will of the alliance when it warns that perhaps a Mytaxi user at some point may be interested in using the car-sharing applications (Daimler) or DriveNow (BMW). “Very soon, these, along with other services, will be part of a new family of brands,” the e-mail said.

The alliance announced today in Berlin will mean the creation of five joint ventures to start up multimodal services businesses (which will operate under the Reach Now brand), for battery recharge (Charge Now), parking (Park Now), car sharing (Share Now ) and the mentioned Free Now, to hire taxis.

The president of Daimler, Dieter Zetsche, said: “Our mobility services have generated a solid customer base and we are now taking the next strategic step: We are gathering the strength and experience of 14 successful brands and investing more than 1,000 million euros to establish a new player in the fast-growing market. ” Both companies claim that the adventure begins with a base of 60 million customers.

Different reports from consultants and executives in the automotive sector have defended so far that the automotive sector is involved in the challenge of going from being a mere manufacturer and seller of vehicles to becoming a provider of mobility services. Especially in relation to the evolution to which the sector is faced with the irruption of the electric vehicle and above all, of the autonomous car.

In this framework, the traditional industry will have to compete with technological giants such as Google and Apple, but also with other operators that are currently more active, such as Uber. They also support those same reports that assume that new battlefield should come hand in hand with alliances that allow to gain internal strength and facilitate the achievement of profitability.

Daimler and BMW take the initiative with an alliance between them, but with an open perspective of being able to open the field with other suppliers, such as startups. The five types of services announced today will end up being more united little by little, according to Harald Krüger, president of Grupo BMW. “These five services will be increasingly merged to form a single portfolio of fully autonomous vehicles, which are loaded and parked autonomously and interconnected with other modes of transport,” he said.

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James Watts

James Watts is a journalist who intends to build a bright career in the media industry. He has great interest in and knowledge about the markets. Hence, He loves to cover the trending news in the market and economy niche. James also published his articles in NPR, HuffPost and Business Times. You can find him at James@allinvestnews.com.